Clear definition of success is critical to ensuring targets, objectives and goals are consistently met. If you have not clearly defined success for your organization, you have no way of effectively managing performance. While many organizations claim their goals and objectives are clearly defined, the reality is that often Key Performance Indicators (KPI’s) are not clear and based exclusively on objective performance measures. Too often organizations base KPI’s on subjective measures. As an example, often organizations will identify delivery of a “quality product or service” which is subjective rather than an objective measure such as “defective rates or return rates below a certain percentage”. In this week’s blog post we are diving deeper in to the second phase of our methodology – Define.
Knowing the Difference
Before beginning to define goals and objectives we must understand what they are. Goals and objectives are different – they do not mean the same thing and it is extremely important to understand how they differ in order to effectively define them. Objectives are “what” you want to achieve and goals are “why” you want to achieve those objectives. Our Group President and CEO James Chalmers is often speaking to the point that projects may several objectives, but ultimately every project or organization rolls up into a single unifying goal.
“I recently found myself debating this at a conference. The project in question was said to have 3 primary goals. 1) Increased Traffic, 2) Increased Customer Service Scores and 3) Increased Re-orders. These are not goals! These are objectives. Why did this company want these 3 things? Simple! They want to increase revenue.”
KPI’s are critical metrics that measure performance against objectives. They are important because they provide focus – but only if they’re clearly defined and easy to understand. An easy way to begin defining KPI’s is by asking two questions:
What are you trying to achieve (your objectives)?
How will you know if you have achieved it?
If we look at the example objectives above, we can clearly measure performance against increased traffic, increased customer service scores and increased re-orders. If you have selected the right objectives and are successful in meeting them – this means you are achieving your primary goal.
Making it SMART
Both objectives and KPI’s need to be SMART. For those unfamiliar with the acronym, SMART goals are:
This can be illustrated through a simple example. Say you decide that you want to increase your organizations sales. “Have a huge increase in sales” is not a SMART goal; while increasing sales may be Relevant for your organization, the goal lacks Specificity, cannot be easily Measured, and is not Time-bound. You would never really know if you had accomplished it. A SMART version of that goal could look like this: “Grow our sales by 10% by December 2018.” This has a specific target, a measurable number and it is time bound. SMART goal setting brings structure and the ability to track your goals and objectives. Instead of vague resolutions, SMART goal setting creates a clear path to what you are looking to achieve. Every goal or objective can be made S.M.A.R.T. and as such brought closer to reality.
Ensuring goals and objectives are differentiated, clearly defined with objective KPI’s and are SMART is critical to the success of any project or organization.